VA Loans for Boats and RVs

A VA loan is a great option for financing or refinancing a home, but what about boats and RVs? VA loans are typically more flexible than traditional mortgage options and offer borrowers an opportunity to finance many different property types.

Let’s take a look at the VA rules regarding boats and RVs.

Minimum Property Requirements (MPRs) and VA Loans

The VA wants to ensure that the property a Veteran is buying with a VA loan is structurally safe and secure, which means all homes financed through VA must meet the MPRs.

One of the requirements that boats and RVs fail to meet is that the estate must be classified as real property. This means the property must have a permanent foundation, which unfortunately disqualifies boats and RVs from being purchased with a VA loan.

Boats and RVs also fail to meet the VA’s minimum square footage requirement, making them an unauthorized property type for VA financing.

VA Cash-Out Refinance for Boats or RVs

If your dreams of boat or RV ownership are strong, your options of using VA financing aren’t over completely. Homeowners who have equity in their home may be able to use a VA cash-out refinance loan to purchase a boat or RV. Cash-out refinancing allows homeowners to tap into their home equity and use the proceeds for any purpose they choose, including purchasing a boat or RV.

For example, if your home is worth $300,000 and you owe $200,000 on your mortgage, a cash-out refinance could allow you to borrow up to $100,000.

Cash-Out Refinance Guidelines

If you’re interested in a cash-out refinance, the VA has a few requirements that must be met before a lender will approve your application.

First, you must be eligible for a VA loan. This means that you must be a Veteran, surviving spouse or military member who meets the VA’s minimum length-of-service requirements. You’ll also need to have sufficient home equity and seasoning on your loan. This means that you must have made at least six payments on your VA loan before applying for a cash-out refinance.

In addition, you must occupy the home as your primary residence. This means you’d have to own a home and live in it full time in order to use this type of financing for an RV or boat. In addition to the occupancy requirements, you must also meet your lender’s requirements for DTI ratio, credit score, etc.

It’s important to note that there are no restrictions on how borrowers spend their cash after refinancing. So it is completely acceptable to use it for home improvements, debt consolidation or other purchases.

Eligible Property Types for VA Loans

One of the great things about VA loans is that they can be used to purchase several different types of properties. While a boat or RV isn’t eligible for VA financing, there are many other property types that qualify.

Some of VA-eligible properties include:

• Single-family homes
• Multi-unit homes
• Manufactured and modular homes
• New construction
• Condos
• Barndominiums
• Tiny homes

The ultimate goal of VA home loans is to help eligible Veterans purchase their primary residences. Therefore, the VA sets restrictions on what a VA loan can and cannot be used for. Make sure to check the specific requirements for each property type with your lender.

Final Thoughts

While it’s true that you cannot finance a boat or RV with a VA loan, that doesn’t mean there aren’t other ways to utilize your VA loan benefits to achieve that goal. A VA cash-out refinance loan is a great option for borrowers with enough equity in their home looking to purchase a boat or RV.